World Of the Web Guidelines for Advertisers

Slide 1: ‘Word of the web guidelines for advertisers’ Understanding trends and monetising social networks

Slide 2: Microsoft Digital Advertising Who uses social networks? Solutions commissioned international Top level findings include: All social networks attract different users so you cannot qualitative research1 and European • Social networkers trust their community: adopt a ‘one profile fits all’ mentality. Instead,people quantitative research2 to understand 64% of European social networkers will visit exhibit different types of behaviour, depending on a website related to what they have seen or the type of network. the behaviour of consumers using read on a friends site social networking sites, and their Providers such as FaceBook and Bebo have grown popular attitudes towards advertising, to • Social recommendation is key: 23% of European through the seemingly limitless potential of their open, social networkers paste comments about an ad and provide brands with insights to a quarter have forwarded an ad to others unconstrained networks, enabling millions of users to engage and monetise social networks. potentially make contact. Results from the qualitative • Social networkers want new forms of research, shows that users see associated dangers with engagement with brands: 43% of European ‘open’ networks and the type of content they publish in The research revealed the extent to social networkers have visited the personal the public domain. This drives users to either change the which consumers recommend brands space of a brand, and 16% have already had security settings on their personal space or set up spaces and ads to friends in social networks a dialogue or sent a message to a brand with greater security options such as Window Live Spaces. and the inherent trust consumers • The advertising potential for social networking This enables users to control who does and doesn’t see place in their social network. This their site, making them feel safer and less prone to is huge: 60% of European social networkers are unsolicited contacts. presents a huge opportunity for prepared to include sponsored content on their advertisers to identify new ways of personal page, whilst 10% have already branded driving social recommendation by their space creating new business models which incentivise opinion leading social networkers as online advocates for their brands. “Advertisers need to harness the power of social recommendation by identifying advocates of their brands online and making them the first to receive deep and relevant content to encourage them to socially recommend a brand to a friend. By creating performance-related For advertisers, this demonstrates users have different levels of engagement depending on the type of network they incentives for social recommendation, interact with. Content shared in more open networks tends advertisers have an opportunity to to be quite shallow and there is less emotional attachment engage with large scale consumer and investment with it; it may not truly reflect the self, as audiences and monetise social the individual protects themselves. networks.” In contrast, in closed networks – where the author has Marc Bresseel, Regional Sales Director, EMEA more control over who views their space, behaviour is more rational. The content that is shared in these closed What are social networks? environments tends to be deeper and more personal than in an open network. The fundamental growth of social networking is based on personal spaces - a simple, easy and hugely addictive way “The growth of the networked society, for people to be connected. People build a personal website, then connect with their friends to share thoughts or details the increase in individualism, and the of their life - such as photos and video, to meet new people, shift away from ‘automatic’ deference to or generally to browse other people’s lives. Sites such as society’s institutions mean that personal Windows Live Spaces, MySpace and Facebook encourage sources of advice and influence are and allow people to exchange information about themselves and use blogs, email, or instant messaging to communicate more important than ever.” Future Foundation, Social Networks 2006 with the world-at-large. This form of social media provides an outlet for creativity, allowing users to express their individuality whilst satisfying their need to be part of a community. 1 Essential Research 2006: Qualitative research with 200 regular social networkers, aged 18+ in the UK, France, US, Canada, Brazil, China. 2 MetrixLabs 2007: Quantitative research with 200 social networkers aged 18-24 years; 25-34 years; 35-45 years; 50:50 male-female ratio in the UK, France, Germany, Spain, Italy, Denmark, Belgium and Netherlands.

Slide 3: Why are people using social networks? Users who want to keep in touch may have significant moments that they want to share with friends such as It is a common misconception that people only use social a wedding or the first year of a baby’s life. The ability networking sites for dating and meeting possible partners - to document the moment and share this with friends today, only 20% of all users cite this as their primary usage. is a driver to setting up such a personal space amongst In fact, nearly 60% of Europeans use social networking as an older generation. a tool to facilitate existing relationships and keep in touch with friends and family. Approximately half use it to express At the other end of the scale social networking is used by opinions and views on topics of interest, whilst 47% use social younger influencers to socially co-ordinate their social life networks to deepen relationships with like-minded people. and to share photos to relive their experiences. Reasons for using social network The research demonstrates UK FR ES IT DE DEN BE EMEA NLD TOTAL that different cultures shape I want to meet different adoption trends of social new people with 49% 34% 47% 49% 61% 48% 53% 38% 47% similar interests networks across Europe. For example, It is a good way 11% 28% 9% 25% 31% 18% 29% 18% 20% as a nation the Spaniards are known to date To express my as sharers, and use social networks to opinions and views on topics 55% 51% 65% 61% 36% 42% 37% 23% 46% share information with their friends; of interest from 81% sharing photographs, To keep in touch with 75% 55% 55% 47% 57% 63% 55% 67% 59% 76% enjoy reading about their family/friends friends personal experiences I like looking at other people’s 62% 58% 55% 57% 41% 57% 62% 66% 57% and 65% expressing opinions spaces and views on topics of interest. Using it for a specific reason, 13% 21% 22% 25% 15% 14% 17% 14% 17% such as wedding, The Dutch, in comparison, enjoy the voyeuristic side of job networking social networks, with 66% citing that they like looking at other people’s spaces. As early adopters, the Dutch share information and enjoy learning about other people reflecting These different motivations relate to the basic underlying their natural culture of openness and curiosity to know human principles and needs of self expression, the desire to more about each other. For them, the behaviour of looking be part of a community and to extend existing friendships at other people’s spaces is a socially accepted voyeurism through networks. It is these motivations that advertisers which is easily seen on the streets of Amsterdam where need to recognise as the impact and the rationale for it is accepted to look in to the windows of people’s homes behaviour within social networks, not just the different and ‘get to know them’. choice of networking sites. Only 41% of Germans exhibit these voyeuristic tendencies Understanding motivations to use where invasion of the ‘home’ space is considered unpleasant and privacy is a core value. However, over 60% of Germans Personal achievement/ Individualism Friendship Discovery & Sex & use social networks to meet new people with similar interests actualization & creativity & belonging exploration relationships as they have a desire to expand their understanding and Self expression Communities Extending networks participation in a particular interest area. The research demonstrated that the French use personal These need impact choice of site and behaviour within it spaces to showcase themselves and provide a springboard “Within the realm of consumerism whether Documenting the moment Popularity Playing the field for personal opinions. Generally, the French do not over the behaviour is online or offline, you will seeking emphasise opinions and views. Social networking provides see some universals and then you will see Self- Social Friendly a new platform for over 50% of respondents to gain Networking actualization coordinating curiosity cultural differences. Besides, the obvious recognition for themselves and their opinions. New Keeping Innocent mirroring of behaviours online that appear dimensions in touch voyeurism In the UK, a key trend from the qualitative research was offline in cultures, you also have variables All these have distinct motivations, ways of behaving and relating to content and the viewer the materialisation of personal spaces as a new form of that influence choices the consumer will social currency – instead of handing out mobile numbers, space addresses are used as a means of communication. make in today’s market place.” This is reflective of the British culture to share information, Anne Kirah, Dean of 180° Academy. particularly recommendations on personal experiences.

Slide 4: When are people using social networks? Women tend to use social networks more than men, with A third of European social The qualitative research identified the adoption of social 37% of women in Europe visiting social networks every day networkers visit networks networking takes place as people hit their late teens. This compared to 27% of men. The qualitative findings also show that women are more comfortable sharing the ‘personal’ side is because a younger generation tends to rely on instant at least once every day and communication such as Windows Live Messenger to keep of things online and use social networking sites to maintain their friendships. They are also more willing to explore and 41% a few times a week. in touch. As people grow older their personal networks expand and they want to share more in depth and meet new people through ‘friends of friends’ networks. Men however tend to use social networks for specific needs such relevant content about their lives with friends. This is when as increasing networks around employment or job related social networking sites become more relevant and users situations or maintaining or gathering information about a extend their instant messenger community via personal hobby or interest. spaces such as Windows Live Spaces. Time of day spent on social networks Frequency of usage – European age EMEA 100 UK FR ES IT DE DEN BE NLD TOTAL 07:00-08.59 4% 3% 2% 7% 4% 3% 5% 3% 4% 90 09:00- 10:59 6% 10% 7% 20% 12% 4% 12% 5% 9% 80 11:00-13:59 7% 6% 11% 15% 8% 8% 3% 6% 8% 14:00-16:59 7% 8% 6% 14% 9% 8% 8% 11% 9% 70 17:00-19:59 18% 26% 11% 11% 29% 27% 23% 19% 20% 60 20:00-22:59 52% 45% 39% 29% 39% 48% 46% 53% 44% 23:00-06:59 8% 4% 26% 6% 2% 4% 5% 4% 7% 50 40 Over a quarter (26%) of the Spanish 30 log onto social networks after 11pm, compared to just 7% of average 20 Europeans. Anne Kirah commented: 10 “The Spanish work late, eat late and Between Between Between Total then want to continue their social 18 and 25 and 35 and relations even after they go home. 24 years 34 years 45 years There is a very strong desire to keep Everyday A few times Once a Once every the social fire burning as long as a week week two weeks possible after work or school.” The adoption of social networking is high in all European Length of time spent on social networks countries. A third of European social networkers visit networks at least once every day and 41% a few times a EMEA UK FR ES IT DE DEN BE NLD TOTAL week. In general, it’s a popular evening activity, with 44% of Less than European social networkers logging on between 8pm and 15 mins 6% 9% 6% 7% 12% 15% 9% 25% 11% 11pm. On average 25% of European social networkers spend 15-29 mins 24% 33% 21% 19% 27% 29% 20% 31% 25% at least 15-29 minutes interacting on social networks, whilst 30-59 mins 31% 22% 31% 28% 32% 24% 29% 24% 27% approximately a third spend between 30-59 minutes. Between 1 21% 20% 25% 23% 15% 17% 20% 11% 19% and 2 hours Frequency of visiting social networks More than 19% 17% 18% 24% 15% 16% 23% 11% 18% EMEA 2 hours UK FR ES IT DE DEN BE NLD TOTAL Every day 37% 31% 24% 39% 29% 41% 35% 23% 32% The Italians are the heaviest users of social networks - with A few times 41% 46% 52% 39% 41% 30% 40% 36% 41% 24% of Italians spending over two hours each week on social a week networks. Tools such as social networking and Messenger are Once a week 13% 12% 12% 15% 22% 16% 13% 22% 16% used as an enhancer to life. For example, people who may Once every 10% 12% 12% 7% 9% 14% 12% 19% 32% two weeks have been at a party together may connect their face-to-face friends and people they have met via online interactions in social networks to build the relationship.

Slide 5: Power of Social Recommendation Interestingly, 61% of French social A strong element of trust exists amongst social networking networkers aged 35-45 years old communities. Forrester states that 80% of consumers trust have visited a brand, company advice from friends online – that is three times as much trust than in ads via traditional media.4 This trust means social or organisation’s personal page networkers have a strong influence within a community – compared to just 23% of the particularly those driving social recommendation of Dutch in the same age bracket. advertising/brands. The French as a culture are brand This influence is demonstrated in the different forms of social recommendation taking place online. conscious and seek information to make an informed decision before • Direct recommendation: a quarter of social networkers forward ads to their friends any purchase. • Indirect recommendation: 64% of consumers are The Dutch in comparison are more stimulated to visit other websites to find out more about what they have seen on their friends’ site interested in enhancing their social life online and understanding more Combine these figures with the fact 25% of European social Recent Jupiter Research shows networkers post comments about specific ads and more about what a brand has to offer. brands are increasingly using than 60% are prepared to put sponsored content on their personal space, and it demonstrates that advertisers need social networking to reach to identify ways to tap into the opinion leaders of different consumers – with 48% of social networks. marketers planning to use social Activities as a result of visiting friends’ pages: networking channels in 2007, users of other social networks compared to 38% last year3. EMEA UK FR ES IT DE DEN BE NLD TOTAL The Word of the Web Visited a Website related to what you read or saw Forwarded the space, advertisement, or link to the space of another friend Told a friend about advertisement 68% 56% 79% 72% 58% 75% 61% 55% 64% 35% 24% 13% 34% 26% 20% 9% 17% 24% However, for advertisers to truly or product through another means 31% 22% 18% 22% 20% 21% 12% 15% 21% engage in this new online social Visited a Web-related site and posted opinion or writing about space/ad/product 25% 33% 37% 28% 19% 22% 14% 15% 23% media they need to recognize Visited a related website and uploaded photos or video 38% 26% 40% 40% 24% 20% 32% 18% 29% that the power of social Used a search engine to find out more networking lies with the information about product/service 46% 43% 42% 49% 33% 34% 32% 22% 37% consumer, whilst ensuring that None of the above 10% 14% 5% 3% 12% 13% 14% 30% 13% they engage effectively with the Two-way dialogue right consumers. Whilst consumers are demonstrating their acceptance of a brand presence in their social network, they do not want a brands communication to be one sided - there is a great opportunity for deep and engaging relationships with brands. Some 43% of European social networkers have visited a personal space of a brand; and surprisingly 16% have already had a dialogue or sent a message to a friend. This reinforces the fact brands have to engage in social networks and be seen to be part of something rather than trying to push the consumer to a brands site. 3 Jupiter Research report, March 2007: Social networking sites determining opportunities in a competitive landscape 4 Forrester Research 2006

Slide 6: Who are the opinion leaders? In comparison the Germans, want to Firstly, advertisers need to understand who the key learn about a product in more detail influencers, opinion leaders and informers are. This and depth and value the opportunity has to start at a basic level about who is talking about the industry, products or competitors? What do they to gain more insight from closer recommend? Through what channels do they spread interaction with a product or from the word on the web? being able to review other people’s reviews. Therefore identifying key These people have an influence online, people listen to them, and most importantly, act on their recommendations. influencers and driving new products Advertisers need to use this information to create a map of through their networks is critical for all the people blogging about their product and plot all the advertisers looking to increase connections between them and all of the millions of users connected to the social network. Visualising these social awareness and interest in new communities will allow advertisers to separate the products in the market. influentials (those with lots of connections) from the ‘dead ends’ (those with none). Social Networking Map So how can advertisers engage in this new Word of the Web? The Danish are the most responsive to ads in social networks (66%) compared to just 13% of Germans and 14% of Dutch. According to Anne Kirah face to face interactions are very important in Denmark but the Danes use social networks to enhance their everyday lives – if an advertisement is relevant, meaningful and desirable they will respond to it.

Slide 7: Engaging with opinion leaders Case Study: One of the first firms to Advertisers need to examine different ways to engage with experiment with opening up its brand these opinion leaders. To date, 31% of European social networkers have responded to an ad – the main reason is was Nike. At NikeID consumers can because it was relevant to their needs. Advertisers must personalise their own shoe, and then therefore understand and respect why consumers are interacting with a network in the first place. As with buy a pair of their bespoke designed advertising in the offline world, online adverts need to shoe for 145 euros. The key influencers reflect the environment within which they are placed and ensure the ad is relevant to a specific need. This will enable are those who design their own shoe. brands to develop interesting and relevant content that Nike marketers monitored the designs consumers will either forward directly to friends / contacts, to understand the upcoming consumer express a positive opinion about publicly; or engage with directly on their site. trends. In one month they identified 20% more blue shoes being designed, Providing content and spotted a new trend was starting. Advertisers need to provide consumers with different types of content that allow them to interact, engage or create it Nike then ensured its production themselves. For example over 80% of European social facilities were geared up to meet the networkers would put photos on their personal page. In the UK, in particular, this form of content is one of the needs of consumers and by the time key drivers for people using social networks wanting to the late adopters realised that blue share and document different times in their lives. was cool, the shops were stocked. The collaborative approach For advertisers to really engage in social networks, they need to identify collaborative approaches to get opinion leaders involved with the brand. Social networkers want to engage with the brand more extensively and the brand has to therefore be prepared to open itself up and invite influential networkers to comment on product development, brand strategy or customer service. They even need to be given content they can comment on in the public domain to ensure they do not loose the power to control content. This type of relationship allows advertisers to create new forms of business models to incentivise social networkers. By creating performance related social recommendation incentives advertisers can engage with social networks on a different level and build a community of advocates. For example, if an advertiser provides an influential social networker with an exclusive preview of a new advertising campaign and he forwards this to his friends, he writes a comment or puts it on his website, the social networker is rewarded for his efforts. For example, an advertiser could provide an influential social networker with an exclusive preview of content – such as a pre-released record or a campaign around user generated content so they have an opportunity to view it, or participate first. If the experience is positive he is likely to forward it to his friends or writes reviews about his experience.

Slide 8: Another example is the “Popularity Seeker” – here Microsoft Digital the user enjoys the updating and decoration of their space – the content on their space is crucial to their Advertising Solutions outward expression of self, and often the content on their space is a point of conversation within their Guidelines to Advertisers network. The type of user is most likely to welcome “obvious” brand association, particularly if it adds to for Social Networking how they want to be perceived. 4 Empower participants Brands are entering a world of empowered participants who control 1 Understand consumers’ motivations for using social networks To successfully engage in social networks advertisers need to their own content, express their individuality and would welcome having this power over branded properties on their Space. understand the mindsets and behaviours that are occurring within these As we have seen in the research some networkers actually welcome brand networks and think about both the author’s and viewer’s motivations. association as it furthers their expression of self to their chosen network. By tapping into these advertisers will gain permission by creating relevant By associating the brand with individuals or communities it immediately creative messages. offers relevance and context for the advertiser. However, it has to be clear Advertisers also need to recognise either the lifestage a network is why the brand has become part of the conversation and by becoming part appealing to or a particular hobby or interest. If the network revolves of the conversation it has to open up the brand for interaction. around the sharing of social lives then by being aware that this is the To be successful brands have to stay authentic and advertisers need to ensure mindset of the author and viewer, advertisers can fit more seamlessly they carefully select the right reason to create a space, such as product in, without intruding. launches or how to project an image through the use of photos. Opening up Express yourself as a brand the brand for individual expression empowers users and creates a positive 2 People are using social networks to express their individuality and brands should too. To fit in this environment, a willingness to have a voice, experience, thereby extending its appeal. Identify online brand advocates expression or character is key. The network can be used to express a side of a brand people don’t normally see and encourage them to interact with 5 Advertisers need to identify relevant networking sites i.e. it includes people who already use/buy a company’s product and align to this audience it – but it needs to remain authentic. and existing customer segmentation models. The simplest ways to analyse Create and maintain good conversations 3 Individuals are powerful in this environment – they are the content creators, conversation creators and community creators. Brands that are the network and see which users generate the most traffic/comments to their pages and analyse the content to see what their areas of interest are. By researching people blogging or commenting on a product in this willing to have a dialogue, rather than a monologue fit more naturally into environment, advertisers can reach out to them and begin a dialogue this environment, and could truly benefit from its viral power. such as offering free samples or advanced product releases. Advertisers must also make ads clear in terms of what users are expected to do so they can make a decision whether it is relevant to them. However, If the brand is niche then advertisers can search for networks/or within only the most interested user will allow the submission of their space to an networks where there are categorises of interest. advertisement. Advertisers need to tap into those individuals who are ‘valuable’ networkers – i.e. visit the site regularly and are influential to the brand. The benefit is their potential to communicate with authors and their networks - so the message has a viral impact and arguably more longevity. But if a brand starts a conversationwith a consumer they have to ensure they finish any discussion. For example users who interact with spaces for social co-ordination (Social Co-ordinator) might capture picture and comments relating to a particular part of their social life on their space – The Golden Rule: Behave like a social networker such as clubbing. Advertisers can use this insight to target the user The fundamental principle is that the best with RSS feeds on up-to-date nightlife advertisers on a social network will behave information to drive interaction. like the best social networkers by: This plays a dual role – it enables • Being creative the author to reinforce their • Being honest and courteous (ask permission) position as a “social influencer” to themselves and their network, • Being individual thereby gaining further acclaim. • Being conscious of the audience • Updating regularly

Slide 9: “The research has identified the new phenomenon in social networking and the rise of the new consumer – one that is powerful, savvy and in control of their content. Advertisers have two challenges facing them today – first, how to engage with social networkers; and secondly how to monetise this growing and evolving environment. “Advertisers need to realise it’s not enough to just be online, they have be part of the new online world and they have to be invited in by consumers. For those who understand this and get it right the future opportunity is vast. Those who don’t, risk being left behind “The Microsoft Digital Advertising Solutions Guidelines for Advertisers are designed to capture insight from the research to provide advice for advertisers to engage and reap the rewards of this new and exciting online environment.” Marc Bresseel, Regional Sales Director, EMEA, Microsoft Digital Advertising Solutions